Use the Following Information to Answer Questions

question 50

Multiple Choice

Use the following information to answer questions
Heart Company has a total of 750,000 shares issued.Diamonds Inc.purchases 150,000 of Heart shares for $10 \ share on January 1, 2011.On December 31, 2011, Heart has a net income of $125,000 and Heart shares are trading for $9.50 \ share.
-If this is an AFS investment, Diamond would:

• A)record a decrease to the investment in shares account
• B)record an unrealized loss to be recognized on the OCI
• C)record an unrealized loss in net earnings
• D)not be required to make any entries on December 31

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